ECONOMIC SLOWDOWN
Why corporate banking is not a silver bullet
Banking sector’s efforts in the business and corporate and investment banking segments are under scrutiny
The banking sector’s efforts in the business and corporate and investment banking segments have come under scrutiny in the wake of a recent Moody’s report that warns that the slow economy will pile pressure on to customers, rendering them unable to pay their debts. In the ratings agency’s report, lead analyst Nondas Nicolaides notes that households will face problems making repayments despite reducing debt as a share of disposable income. Banks have responded by tightening lending to individuals or retail customers and focusing on corporate entities instead. For example, Standard Bank — the largest bank by assets — has announced its strategic focus to grow its South African business banking segment, and grew loans 15% during the first half of the year. The segment is part of Standard’s personal and business banking unit. It provides banking and lending solutions to smaller businesses.Nicolaides warns, however, that modest economic growth in 2017 and 2018 will "inevitably" weaken the...
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